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05-15-2013, 12:49 PM
  #101
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Originally Posted by joestevens29 View Post
But now according to various arena insiders — with strong regional backing from St. Albert, Sherwood Park, Spruce Grove and Leduc of the city’s plan to request $25 million from the province from its regional project fund, and today with a new injection of private funds to cover part of the final $30 million shortfall — funding sources for the entire $480 million have been identified and the deal is likely to win final approval in front of city council at today’s meeting.

http://blogs.edmontonjournal.com/201...on-arena-deal/
I certainly hope that is the case. I just want them to break ground already.

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05-15-2013, 12:55 PM
  #102
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About time. Glad to see Katz stepping up to provide some private funding.

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05-15-2013, 12:58 PM
  #103
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Originally Posted by joestevens29 View Post
Billionaire owner that negotiates like a billionaire overshadows everything else.
I understand how his sleazy negotiating tactics have turned people off. Unfortunately, he knows the city really wants this development so why not squeeze a few million extra out of them if he can. So much of what we hear is political posturing. There's a civic election this year and the Mayor's seat is up for grabs. Some of these Councillors will sell their own mothers to lead City Hall and will say anything that makes Katz appear as the bad guy. I'm not saying he isn't the villain here but imo the debates Council has been having are mostly theatrics and the deal is basically done.

You put Premier Redford's feet to the fire and suddenly the province has all kinds of funding avenues available that the city can take advantage of without breaking her word that she won't DIRECTLY fund the arena. Nope, just indirectly through funds that were available before for infrastructure projects and other provincial committees that control hundreds of millions of dollars and the city can do with the funds whatever they like as long as the committee approves.

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05-15-2013, 12:58 PM
  #104
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Yeeeeeeeeeeeeeeeeeeeeeeeah!

Celebrate, Edmonton!

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05-15-2013, 01:04 PM
  #105
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Originally Posted by worraps View Post
As chrisj pointed out the ticket tax money is coming out of Katz's pocket in the form of lower market clearing ticket prices.
That's an incorrect assumption. Do gas prices going up cause you to consume less gas or do you just buy the same as you always do? Supply and demand is much more complicated.
The ticket tax comes from the seat holders and does not necessarily affect Katzs bottom line one bit.

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05-15-2013, 01:10 PM
  #106
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I certainly hope that is the case. I just want them to break ground already.
Me too. This should have been well into construction by now.

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05-15-2013, 01:10 PM
  #107
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No it's not. Those things are ancillary to the arena being built and will have their own costs associated with them. All the things you project about growth in property values and the rest are taken into account by the use of the CRL. The city has budgeted an amount equal to what they expect to gain based on the project but the $55 million short fall takes them above that number.
There's no arena district without the arena. I never said the city was paying for hotels, condo/office towers nor do I believe they will pay for that.

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05-15-2013, 01:19 PM
  #108
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Does "private funds" = Katz?

Or is it local businesses who stand to benefit greatly from the new development?

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05-15-2013, 01:24 PM
  #109
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I have a feeling its a coalition of private businesses that have an agreement with katz to operate in the new district coming up with the remainder. If you remember, there was a controversial taxing rule being proposed that a business outside of this select group pays taxes, and if they pay more tax than 250k or whatever it was, then it offsets the business group taxes.

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05-15-2013, 01:30 PM
  #110
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Originally Posted by nabob View Post
Does "private funds" = Katz?

Or is it local businesses who stand to benefit greatly from the new development?
Most likely Katz (revenues is the main reason they didn't seek it out sooner, or that's my understanding), but may have been Paranich(sp), he's got ALOT riding on the Arena and area in terms of property development.

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05-15-2013, 01:38 PM
  #111
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Most likely Katz (revenues is the main reason they didn't seek it out sooner, or that's my understanding), but may have been Paranich(sp), he's got ALOT riding on the Arena and area in terms of property development.
Was going to buy each of my daughters a condo in those towers, Terry Paranych is probably in on. Going to squeeze him for the old high school buddy discount. Maybe these developers are kicking in some to get the ball rolling. Time is money for them too.

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Old
05-15-2013, 01:46 PM
  #112
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That's an incorrect assumption. Do gas prices going up cause you to consume less gas or do you just buy the same as you always do? Supply and demand is much more complicated.
The ticket tax comes from the seat holders and does not necessarily affect Katzs bottom line one bit.
This really isn't as complicated as you think it is. For example:

I am willing to pay $250 to go to an Oilers' game in a new arena. I don't really care whose pockets that $250 ends up in: Katz's or the City's. I just want to exchange no more than $250 for a ticket to an Oilers' game in a new arena. For the sake of argument let's assume everyone else has the same demand curve as me.

If a new ticket tax is suddenly introduced (let's say 5%), I'm still only willing to pay $250 for my ticket so either Katz reduces the price to $238.10 or I and everyone else stop going to Oilers games. This represents a very real decline in Katz's wealth.

If you want to introduce the supply side of the argument, here it is: Katz needs more revenue (bigger arena, other event revenue, even higher prices) to continue supplying the City of Edmonton with NHL hockey.

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05-15-2013, 01:53 PM
  #113
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Originally Posted by worraps View Post
This really isn't as complicated as you think it is. For example:

I am willing to pay $250 to go to an Oilers' game in a new arena. I don't really care whose pockets that $250 ends up in: Katz's or the City's. I just want to exchange no more than $250 for a ticket to an Oilers' game in a new arena. For the sake of argument let's assume everyone else has the same demand curve as me.

If a new ticket tax is suddenly introduced (let's say 5%), I'm still only willing to pay $250 for my ticket so either Katz reduces the price to $238.10 or I and everyone else stop going to Oilers games. This represents a very real decline in Katz's wealth.

If you want to introduce the supply side of the argument, here it is: Katz needs more revenue (bigger arena, other event revenue, even higher prices) to continue supplying the City of Edmonton with NHL hockey.
I do think that for the short-term ticket prices for Oiler events won't matter. Fact is a lot of the tickets are corporate and there is enough rich diehard fans that have money. Long-term who knows. My concern however would be with the Oilkings, Rush, certain concerts etc...

A perfect example for me is boxing at the shaw. I never missed a fight for about 6 years. If I did miss one it was because of a birthday or wedding. But now that tickets are $60 bucks all tax included I kinda watch which cards I go to. The cards have been weak for awhile now, but for 40 or 50 bucks I didn't care. Now that it's $60 I think twice and pick and choose.

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05-15-2013, 01:57 PM
  #114
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Originally Posted by fysloc View Post
I have a feeling its a coalition of private businesses that have an agreement with katz to operate in the new district coming up with the remainder. If you remember, there was a controversial taxing rule being proposed that a business outside of this select group pays taxes, and if they pay more tax than 250k or whatever it was, then it offsets the business group taxes.
This would be a totally outrageous tactic that would be 100% unacceptable.

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05-15-2013, 02:00 PM
  #115
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Quote:
Originally Posted by worraps View Post
This really isn't as complicated as you think it is. For example:

I am willing to pay $250 to go to an Oilers' game in a new arena. I don't really care whose pockets that $250 ends up in: Katz's or the City's. I just want to exchange no more than $250 for a ticket to an Oilers' game in a new arena. For the sake of argument let's assume everyone else has the same demand curve as me.

If a new ticket tax is suddenly introduced (let's say 5%), I'm still only willing to pay $250 for my ticket so either Katz reduces the price to $238.10 or I and everyone else stop going to Oilers games. This represents a very real decline in Katz's wealth.

If you want to introduce the supply side of the argument, here it is: Katz needs more revenue (bigger arena, other event revenue, even higher prices) to continue supplying the City of Edmonton with NHL hockey.
So the moment Katz raises ticket prices after a year by 5% you will instantly hand in your tickets? Nothing will eart into the Katz pie because if he finds out he is losing $5 a ticket from his projections he'll simply raise ticket prices that amount and if you don't want to pay it one of the 5 or 10 thousand people waiting in line or whatever that number is will step up quite easily.

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05-15-2013, 02:00 PM
  #116
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I think a better example that people can relate to is car purchases.

You have $25,000 for a new car. You don't care how that money is divided between government taxes/dealer fees/commission/manufacturer cut. Your goal is to get a car for $25,000 or less. Doesn't matter if theres a billion cars available to buy of the same kind, if the cost is still more than $25,000, your not getting it (until supply curve hugely beats out demand curves and the dealer just needs to get rid of it to get anything back and recover costs).

So, dealer fees could be 90% of the cost, and manufacturer 1% of the cost, meaning most money goes to the dealer, and you don't care. Its still $25,000 and thats the bottom line for your purchase regardless of what they do with that money.

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05-15-2013, 02:01 PM
  #117
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Originally Posted by worraps View Post
This really isn't as complicated as you think it is. For example:

I am willing to pay $250 to go to an Oilers' game in a new arena. I don't really care whose pockets that $250 ends up in: Katz's or the City's. I just want to exchange no more than $250 for a ticket to an Oilers' game in a new arena. For the sake of argument let's assume everyone else has the same demand curve as me.
The bolded is obviously not true as people have shown. If you want to go to an Oilers game just like if you want to smoke or drink or put gas in your car you will pay the price and grumble about it but for the most part you will still go.

So what isnt complicated is the fact that it isnt really impacting Katz's bottom line except theoretically.

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05-15-2013, 02:02 PM
  #118
joestevens29
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Originally Posted by fysloc View Post
I think a better example that people can relate to is car purchases.

You have $25,000 for a new car. You don't care how that money is divided between government taxes/dealer fees/commission/manufacturer cut. Your goal is to get a car for $25,000 or less. Doesn't matter if theres a billion cars available to buy of the same kind, if the cost is still more than $25,000, your not getting it (until supply curve hugely beats out demand curves and the dealer just needs to get rid of it to get anything back and recover costs).

So, dealer fees could be 90% of the cost, and manufacturer 1% of the cost, meaning most money goes to the dealer, and you don't care. Its still $25,000 and thats the bottom line for your purchase regardless of what they do with that money.
The theory is there, but I don't think it applies to NHL hockey in Edmonton right now.

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05-15-2013, 02:04 PM
  #119
worraps
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The bolded is obviously not true as people have shown. If you want to go to an Oilers game just like if you want to smoke or drink or put gas in your car you will pay the price and grumble about it but for the most part you will still go.

So what isnt complicated is the fact that it isnt really impacting Katz's bottom line except theoretically.
Are people willing to pay $10,000 to go to a game. If not, you are obviously wrong.

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05-15-2013, 02:05 PM
  #120
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That's an incorrect assumption. Do gas prices going up cause you to consume less gas or do you just buy the same as you always do? Supply and demand is much more complicated.
The ticket tax comes from the seat holders and does not necessarily affect Katzs bottom line one bit.
yes.

The ticket tax comes from the pot of money people are willing to spend on events.

If demand dictates that the price people are willing to pay for tickets is $100 each then Katz cannot get that $100 per ticket, he can only get $100 minus the ticket tax.

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05-15-2013, 02:08 PM
  #121
fysloc
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This would be a totally outrageous tactic that would be 100% unacceptable.
Just from memory, but it was one of the awkward things that was brought up in council then paula simons did a break down on the journal of how that would work.

Quote:
The updated deal also gives the Edmonton Arena Corporation a guaranteed tax agreement. Under the old framework, the Katz Group had to pay all property taxes on the new arena. Now, EAC will pay $250,000 a year in city property taxes — for the next 35 years. Even if property values around the arena rise, or inflation soars, the tax bill will never, ever rise.
Found here: http://www.edmontonjournal.com/news/...800/story.html

Might have been removed though, I just remember at one time it was mentioned any other businesses who pay over the 250k limit, is used to offset taxes for those group, probably prior to the master agreement being finalized.

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05-15-2013, 02:09 PM
  #122
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Originally Posted by fysloc View Post
I think a better example that people can relate to is car purchases.

You have $25,000 for a new car. You don't care how that money is divided between government taxes/dealer fees/commission/manufacturer cut. Your goal is to get a car for $25,000 or less. Doesn't matter if theres a billion cars available to buy of the same kind, if the cost is still more than $25,000, your not getting it (until supply curve hugely beats out demand curves and the dealer just needs to get rid of it to get anything back and recover costs).

So, dealer fees could be 90% of the cost, and manufacturer 1% of the cost, meaning most money goes to the dealer, and you don't care. Its still $25,000 and thats the bottom line for your purchase regardless of what they do with that money.
So your not going to buy the new car if it costs $25,001? What about $25,002? What about $25,100? Where do you draw the line. It's pretty clear that setting an absolute limit you are willing to spend and then not going over the line is not how people in the real world operate. Even if you did stick to the 25K price they'd probably talk you into undercoating or an extended warrantee.

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05-15-2013, 02:10 PM
  #123
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The bolded is obviously not true as people have shown. If you want to go to an Oilers game just like if you want to smoke or drink or put gas in your car you will pay the price and grumble about it but for the most part you will still go.

So what isnt complicated is the fact that it isnt really impacting Katz's bottom line except theoretically.
Tons of people I know have stopped smoking because it became just too damn expensive for them. Or people who plan summer vacations differently because it costs too much to travel long distances.

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05-15-2013, 02:12 PM
  #124
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Was going to buy each of my daughters a condo in those towers, Terry Paranych is probably in on. Going to squeeze him for the old high school buddy discount. Maybe these developers are kicking in some to get the ball rolling. Time is money for them too.
Agreed, I wonder if the number being reduced from $55M to $30M made it less of "risk" for him, or him and his investors, to get involved to that extent.

No matter who it's from, I'm greatful and I'm very happy this is going to go forward.

As well, I'm very impressed with my soon to be new home of Spruce Grove, stepping up to be a part of this.

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05-15-2013, 02:12 PM
  #125
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A ticket tax is a shared cost. The demand curve is more inelastic than the supply curve(in this case) which means the consumer will be paying for more of the effect of the ticket tax than the producer(Katz). Either way it will be a shared cost with over half coming from consumers. Probably in the range of 70% depending on the elasticities of each curve.

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